Exhibit 10.23
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is entered into as of April 9, 2001, by and
between TSET, Inc., a Nevada corporation ("TSET"), and Xxxxxxx X. Xxxxxx
("Xxxxxx").
WITNESSETH:
WHEREAS, TSET desires to grant to Xxxxxx an option to acquire up to
350,000 restricted shares of TSET's common stock, par value $0.001 per share
(the "Option Shares"), in consideration of valuable contributions made by Xxxxxx
to TSET and its wholly-owned subsidiaries; and
WHEREAS, Xxxxxx desires to accept such option.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants, and agreements set forth herein and for other good and
valuable consideration, the delivery, receipt, and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. GRANT OF OPTION. TSET hereby grants to Xxxxxx an option (the
"Option") to acquire the Option Shares at an exercise price of
$0.885 per share (the "Exercise Price"). The Option shall
immediately and fully vest in Xxxxxx'x favor for all purposes upon
execution and delivery of this Agreement by the parties, as to
125,000 Option Shares. The remaining 225,000 Option Shares shall
vest immediately upon (a) an announcement by TSET's wholly-owned
subsidiary, Kronos Air Technologies, Inc., of a significant order
purchase order for devices embodying the KronosTM technology, or
(b) TSET's shares of common stock, as traded on the
over-the-counter bulletin board exchange, achieving a price of
$2.00 per share. The Option is personal to Xxxxxx and may be
exercised only by Xxxxxx during his lifetime. The Option shall
continue in full force and effect for a period of 10 years from the
date hereof (the "Term"), at which time the Option shall expire and
terminate unless previously exercised by Xxxxxx. The Option shall
not be subject to forfeiture or termination, except for Xxxxxx'x
failure to exercise the Option during the Term.
2. EXERCISE OF OPTION. The Option may be exercised by Xxxxxx, in whole
or in part, at any time during the Term upon receipt by TSET of
written notice from Xxxxxx (the "Exercise Notice"). The Exercise
Notice shall specify the number of Option Shares Xxxxxx desires to
acquire pursuant thereto and provide any necessary or appropriate
instructions to TSET and its transfer agent regarding the
denomination of certificates representing the Option Shares and the
name in which the Option Shares should be registered. The exercise
of the Option shall be on a "cashless" basis and Xxxxxx shall not
be required to remit to TSET any payment therefor.
3. RESERVATION OF THE OPTION SHARES. To ensure fulfillment of its
obligations hereunder should Xxxxxx elect to exercise the Option,
TSET shall reserve from its authorized but unissued capital that
number of shares of its common stock equal to the Option Shares.
4. RESTRICTIONS ON TRANSFER. Xxxxxx acknowledges that the Option
Shares are subject to certain restrictions upon transfer, and
cannot be sold, assigned, transferred, or conveyed (in any case, a
"transfer") except in compliance with such restrictions and
applicable provisions of federal and state securities laws.
Certificates representing the Option Shares shall bear appropriate
restrictive legends and notices. In the event Xxxxxx desires to
transfer any Option Shares prior to the expiration of such
restrictions, TSET shall be entitled to receive from Xxxxxx written
undertakings, certifications, or opinions of legal counsel
evidencing compliance with such restrictions.
5. TAX MATTERS. Xxxxxx acknowledges that treatment of the Option, the
Option Shares, and events or transactions with respect thereto, for
federal and state income and other tax purposes, is dependent upon
various factors and events which are not determined by this
Agreement. TSET makes no representations to Xxxxxx with respect to,
and hereby disclaims any and all responsibility as to such tax
treatment. Xxxxxx shall be solely and fully responsible for the
payment of, and shall pay, any and all federal, state, and other
taxes (including any and all withholding taxes) levied with respect
to the grant of the Option, the purchase of the Option Shares, and
any subsequent transfer thereof. In the event the exercise of the
Option or the disposition of the Option Shares following exercise
of the Option results in Wi1son's realization of income which for
federal, state, local, or other income tax purposes is, in TSET's
opinion, subject to withholding of tax, then at the election of
TSET and prior to the delivery to Xxxxxx of certificates
representing the Option Shares acquired by him pursuant to an
Exercise Notice, (a) Xxxxxx shall pay to TSET an amount equal to
such withholding tax or (b) TSET may withhold such amount from any
compensation or other payments owed by TSET to Xxxxxx.
6. NONQUALIFIED STATUS. The Option is not intended to be an "incentive
stock option" as defined in the Internal Revenue Code of 1986, as
amended, and shall not be treated as such whether or not, by the
terms hereof, it meets the requirements of any applicable
provisions thereof.
7. NOTICES. All notices or other communications given or made
hereunder shall be in writing and may be delivered personally, by
express, registered, or certified mail (return receipt requested),
by special courier, or by facsimile transmission (to be followed by
delivery of a written original notice in the most expeditious
manner possible, as aforesaid), all postage, fees, and charges
prepaid, to TSET and Xxxxxx, as the case may be, to the following
addresses (which may be changed by the parties from time to time
upon written notice given as aforesaid):
To TSET: 000 Xxxxx Xxxxx Xxxxxx, XXX 000
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
Tel.: 000.000.0000
Fax: 000.000.0000
To Xxxxxx: 000 Xxxxx Xxxxx Xxxxxx, XXX 000
Xxxx Xxxxxx, XX 00000
Tel: 000.000.0000
Fax: 000.000.0000
Notices hereunder shall be deemed given when delivered in person,
upon confirmation of successful transmission when sent by
facsimile, or 5 days after being mailed by express, registered,
or certified mail (return receipt requested), postage and fees
prepaid.
8. INTEGRATION AMENDMENT, AND WAIVER. When executed and delivered,
this Agreement shall constitute the entire agreement between the
parties with respect to the subject matter hereof and shall
supersede any and all prior agreements and understandings with
respect thereto. No other agreement, whether oral or written, shall
be used to modify or contradict the provisions hereof unless the
same is in writing, signed by the parties, and states that it is
intended to amend the provisions of this Agreement. No waiver by
either party of any breach of this Agreement in any particular
instance shall constitute a waiver of any other breach hereof in
any other circumstance or any relinquishment for the future of
their respective rights to strictly enforce all of the other
provisions hereof or seek all remedies which may be available at
law or in equity.
9. COUNTERPARTS; BINDING EFFECT. This Agreement may be executed in
multiple counterparts (and by facsimile signature, to be followed
by manual signature), each of which shall be deemed an original,
and all of which shall be deemed to constitute a single agreement.
This Agreement shall be binding upon and inure to the benefit of
the parties' respective permitted heirs, successors, and assigns.
10. ASSIGNMENT. This Agreement is personal to the parties hereto.
Accordingly, Xxxxxx shall not assign or transfer this Agreement
without the prior written consent of TSET, which consent shall not
be unreasonably withheld, conditioned, or delayed; provided,
however, that Xxxxxx shall be permitted to assign or transfer this
Agreement to a legal entity owned by Xxxxxx without such consent.
Any attempted assignment of this Agreement by Xxxxxx without
receipt of such consent from TSET shall be null and void.
11. SEVERABILITY. If any provision (or portion thereof) of this
Agreement is adjudged unenforceable by a court of competent
jurisdiction, the remaining provisions shall nevertheless continue
in full force and effect and the provision deemed unenforceable
shall be remade or interpreted by the parties in a manner that such
provisions shall be enforceable to preserve, to the maximum extent
possible, the original intention and meaning thereof. If necessary
to effect such intent, TSET and Xxxxxx shall negotiate in good
faith to amend this Agreement to replace such provision with
language believed in good faith by the parties to be enforceable,
which as closely as possible reflects such intent.
12. NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the parties and their permitted successors, heirs, and
assigns. Nothing herein, expressed or implied, shall give or be
construed to give any other person, other than the parties and
their permitted assigns, any legal or equitable rights hereunder.
No finder's or other fees shall be payable by either party with
respect to the exercise of the Option or the issuance of the Option
Shares pursuant to this Agreement.
13. STATE SECURITIES QUALIFICATIONS. The sale of the Option Shares
pursuant to any exercise of the Option has not been qualified with
the securities regulatory authorities in any state or other
jurisdiction and the issuance of the Option Shares prior to such
qualification may be unlawful unless such transactions are exempt
from such qualification requirements. The rights of the parties
hereto are expressly conditioned upon such qualification being
obtained, unless any such transaction is so exempt.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon, exclusive of its
conflicts of laws principles.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first written above.
TSET, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
